"Wholesale prices are going up," Electric Department Director David Meyers said. "It's been happening for the last several years and it's going to continue to happen the next several years."
Meyers noted that the increase is due to several factors beyond the city's control, including the economic downturn and regulations set by the Environmental Protection Agency.
"Since the economy tanked, a lot of plants have closed," Meyers said. "The plants that didn't close have cut back, so our load has dropped. Well, everybody else's load has dropped too so nobody wants the excess [power that we could sell], but we still have to pay for the excess.
"Environmental controls are the biggest thing. That's the scrubbers that are being put on at the coal plants to get the particulates out of the air before it's let go out of the stacks. We don't have any ownership in Bowen, that one is 100 percent Georgia Power, but Bowen has been doing their scrubber project for the last several years. We're having to do the same things at our plants to meet the EPA requirements -- clean air for everybody.
"The environmental cost, not only 'no sales' of the excess but what few sales we have had with the market price [being] so low because it's not in demand anymore and then the third thing is really just the economy and the loss of load. So those are the reasons for the increase."
Cartersville residents have not seen an increase in rates since 2005 and Meyers said this one will be very small to account for continuing increases through 2016.
"Every single one of our rates has what we call a PCA -- Power Cost Adjustment -- well, every month I give the billing folks the PCA number for that month," Meyers said. "Every rate is a fixed rate based on what you use, except for the little PCA fluctuation. Georgia Power calls theirs a FCR -- Fuel Cost Recovery -- but Georgia Power's FCR and our PCA is basically the same thing.
"What the PCA does is it fluctuates in accordance with what wholesale power is doing. If wholesale power is high, the PCA goes high. If wholesale power is low, the PCA drops. So the PCA follows the wholesale power market.
"So, for example, if you used 1,000 kilowatt hours last month and you used 1,000 kilowatt hours this month, the bills would be a little bit different because of the PCA. Back in 2005 when we did the last rate change, the PCA was basically zero. Well, over the years since wholesale costs have gone up, the PCA has risen and next month it will be 2 cents for every kilowatt hour. The rates will probably go into effect in February, so we've revised the rates, basically reset the PCA to zero and we start over again."
Meyers explained that the rates will continue as they always have with the exception to reflect the rate adjustment, so the higher bills always seen in the summer may be slightly higher in the future.
"What utilities normally do is they have a summer/winter rate differential. Meaning, you pay more for electricity in the summer time than you do in the winter time," Meyers said. "The reason utilities do that is because our transmission and generation costs from our wholesale providers are based on whatever our yearly peak is, and that's always in the summer.
"So our rates, and every other utility's rates, are designed to give the customer the incentive to cut back in the summer time to try to lower that peak because all of our savings go back to the customers. If we can lower that summer peak, then our generation and transmission costs for the next year are lower and all of that money funnels back to the customers."
Although the change may seem sudden, rates have been increasing for the department for several years without affecting the residential bills.
"I just wanted folks to know this isn't all happening at one time," Meyers said. "So I didn't want everyone to think 'Oh no! We're having a big jump all at one time!'"